UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   -----------

                                    FORM 10-K/A
                Annual Report Pursuant to Section 13 or 15(d) of
                      the Securities Exchange Act of 1934

     For the Fiscal Year Ended December 31, 1998 Commission File No. 0-19301
                                   -----------

                     Communication Intelligence Corporation
             (Exact name of registrant as specified in its charter)

                      Delaware                        94-2790442
            (State or other jurisdiction of        (I.R.S. Employer
            incorporation or organization)        Identification No.)


 275 Shoreline Drive, Suite 500
     Redwood Shores, California         (650) 802-7888                94065
--------------------------------   -------------------------        ---------
(Address of principal executive     (Registrant's telephone         (Zip Code)
              offices)            number, including area code)

           Securities registered pursuant to Section 12(g) of the Act:

                          Common Stock, $.01 par value
                                (Title of Class)

        Indicate by check mark whether the  registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days.

Yes X   No

        Indicate by check mark if disclosure of  delinquent  filers  pursuant to
Item 405 of Regulation S-K is not contained  herein,  and will not be contained,
to the best of  registrant's  knowledge,  in  definitive  proxy  or  information
statements  incorporated  by  reference  into  Part III of this Form 10-K or any
amendment to this Form 10-K.

        The aggregate  market value of the voting stock  (Common  Stock) held by
non-affiliates  of  the  registrant  as of  March  29,  1999  was  approximately
$131,803,421  based on the closing sale price of $1.93on such date,  as reported
by the Nasdaq SmallCap Market.

        Indicate by check mark whether the  registrant  has filed all  documents
and reports  required  to be filed by Section 12, 13 or 15(d) of the  Securities
Exchange Act of 1934 subsequent to the  distribution of securities  under a plan
confirmed by a court.

Yes X   No

         The number of shares of Common Stock  outstanding as of March 29, 1999
was 79,413,954.



<PAGE>
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CIC                                                           November 19, 1998
Confidential
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                                                                READ 1998:17429
Confidential
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                                                                   Exhibit 10.26

                   SOFTWARE DEVELOPMENT AND LICENSE AGREEMENT


        This Software Development and License Agreement ("Agreement") is entered
into this 04 day of December 1998, by and between Ericsson Mobile Communications
AB, a corporation  organized and existing under the laws of Sweden  (hereinafter
"ERICSSON"), and Communication Intelligence Corporation, a corporation organized
and existing under the laws of the State of Delaware (hereinafter "LICENSOR").

                                   WITNESSETH:

        WHEREAS,  LICENSOR  desires to grant to ERICSSON and ERICSSON desires to
acquire  from  LICENSOR  nonexclusive  right(s)  and  license(s)  to use,  copy,
reproduce,  sell or otherwise  distribute  certain  software  programs under the
terms and conditions set forth in this Agreement; and

        WHEREAS,  ERICSSON  is desirous of  retaining  LICENSOR to perform
certain services as described in this Agreement; and

        WHEREAS, LICENSOR desires to provide the rights and licenses and perform
the services  described  herein in accordance  with the terms and  conditions of
this Agreement.

        NOW, THEREFORE, ERICSSON and LICENSOR hereby agree as follows:


                            Attachments
                        Appendix A           Description of Licensed Programs
                        Appendix B           License Fee Schedule
                        Appendix C           NRE Specifications

1.      Definitions

a.      Licensed Programs shall mean:
               Jot;
               OnScreen Keyboard;
               Quick Notes; and
               Sign-it software

               in Executable Code form, as described in APPENDIX A.
<PAGE>

                                                       Exhibit 10.26 (continued)

b. Documentation shall mean all instructions and end-user  information needed to
fully implement and utilize the Licensed Programs. c. Executable Code shall mean
the electronic machine-readable form of the Licensed Programs.

d.                Source   Code  shall  mean  the   original,   human   readable
                  instructions used to produce  Executable Code by,  compilation
                  or assembly process.

e.      Party shall mean ERICSSON or LICENSOR, as identified above.

f.                Project shall mean the  performance of services to develop the
                  Licensed Programs and Documentation and/or modify the Licensed
                  Programs  for   operation  on  specified   ERICSSON   hardware
                  platforms.

g. Proprietary Information shall mean information,  including data and know-how,
which is:

1)      the proprietary property of one of the Parties which is not developed
        under this Agreement; and

2)      disclosed or transmitted by ERICSSON to LICENSOR or by LICENSOR to
        ERICSSON in relation to, or in connection with this Agreement; and

3)      not within one of the exceptions of Paragraph c of Section 9 hereof.


2.      Term

         The initial term of this Agreement shall be for [Confidential  Material
provided  separately to the SEC] commencing on the date set forth above, and
[Confidential  Material provided  separately to the SEC] or any renewal term, of
it's intent not to renew; or until termination pursuant to Sections 3 or 4.

3.      Termination

         a. In General.  This  Agreement  may be terminated by either Party upon
written notice if the other Party breaches any material term or condition of the
Agreement and such breach  remains  uncorrected  for thirty (30) days  following
written notice from the non-breaching party specifying the breach.

         b. Failure to Meet  Milestone or Delivery.  Either party may  terminate
this Agreement  immediately  upon notice to the other party at any time that the
other party fails to meet a mutually agreed upon milestone or deliver an item as
provided by  APPENDIX C within ten (10) days of the date set for such  milestone
or deliverable  item, or at the offended  parties  option,  the party failing to
meet such milestone  agrees to pay the offended party a penalty of [Confidential
Material  provided  separately  to the  SEC]  paid or  payable  by  ERICSSON  in
satisfaction of such milestone or deliverable  item. To the extent that LICENSOR
is unable to deliver acceptable  Licensed Programs and Documentation  under this
Agreement  to  ERICSSON,  LICENSOR  agrees to  [Confidential  Material  provided
separately to the SEC].
<PAGE>

                                                       Exhibit 10.26 (continued)

c.  Obligations  Upon  Termination.  Upon  termination of this Agreement for any
reason, the parties shall have no further  obligations  pursuant to the terms of
the agreement  except Sections 8, 9, 10, 19 and 20 shall survive any termination
or expiration of this Agreement.

d.  Continuance of Licenses.  All licenses for which ERICSSON has fully paid all
royalties   under  this  Agreement   shall  continue  after  any  expiration  or
termination of this Agreement for any reason.

4.      Development of Licensed Programs and Documentation

         a. In General.  In  consideration of the fees described in Section 5 of
this  Agreement,  LICENSOR  will  develop and deliver to ERICSSON  the  Licensed
Programs  according to the development  specifications  set forth in APPENDIX C,
including all necessary  Documentation  as required by ERICSSON.  LICENSOR shall
meet with ERICSSON monthly,  or more often if requested by ERICSSON,  to discuss
and report on the  progress on the Project.  Time for  attending  such  meetings
shall be billed at [Confidential  Material provided  separately to the SEC] plus
travel and living expenses.

         b.  Technical  Design.  To the  extent not  specified  in  APPENDIX  C,
LICENSOR  shall  provide  hardware  and  software  specifications,   performance
specifications,  a narrative description of the Licensed Programs, a description
of  all  input  data  (such  as  type,  size,  range  of  expected  values,  and
relationship  to  other  data),  a  description  and  pictures  of all  screens,
including sequence diagrams, and definitions and descriptions of all outputs and
reports to be generated and the process for generating them.

         c.  Acceptance.  LICENSOR  shall deliver the final  completed  Licensed
Programs  and  Documentation  to  ERICSSON no later than the date  specified  in
APPENDIX  C for  delivery  of the  "Golden  Master",  and  ERICSSON  shall  have
[Confidential  Material  provided  separately to the SEC] thereafter in which to
accept or reject the  delivered  materials in writing.  If ERICSSON  rejects the
Licensed  Programs  and  Documentation,  ERICSSON  shall  specify in writing its
grounds  for  rejection  and  LICENSOR  shall use its best  efforts  to make the
Licensed Programs and Documentation  conform to the  specifications  provided by
ERICSSON as soon as possible. LICENSOR shall continue to use its best efforts to
make the Licensed Programs and Documentation conform to the specifications until
ERICSSON  accepts the Licensed  Programs and  Documentation  or terminates  this
Agreement upon written notice to LICENSOR.

         d. Training.  LICENSOR  shall provide  ERICSSON with training on use of
the Licensed  Programs,  as requested by ERICSSON.  Such training will be billed
[Confidential  Material  provided  separately to the SEC] plus travel and living
expenses.

         e. Integration Support.  LICENSOR shall provide ERICSSON with technical
assistance   for  testing  and   integration   of  the  Licensed   Programs  and
Documentation  into  ERICSSON's  end user  products.  Such  assistance  shall be
rendered at the request of ERICSSON at ERICSSON's  facility in Research Triangle
Park, North Carolina,  USA or Manchester,  England.  Integration support will be
billed at [Confidential Material provided separately to the SEC] plus travel and
living expenses.

         f.  Maintenance  and  Support.  During the warranty  period  defined in
Paragraph 19, below, LICENSOR shall perform remedial and preventive  maintenance
and  support  for the  Licensed  Programs  after  their  acceptance  so that the
Licensed  Programs  continue to perform in  accordance  with the  specification.
LICENSOR shall provide telephone support, including dial-up support, between the
hours of 8:00 a.m. and 5:00 p.m.,  U.S.  Eastern Time,  Monday  through  Friday,
excluding  federal  holidays  or at such  other  times  or time  zones as may be
requested by ERICSSON from time to time. LICENSOR shall also provide maintenance
and support as requested by ERICSSON for each product line using the Licensed
<PAGE>

                                                       Exhibit 10.26 (continued)

Programs.  ERICSSON  and  LICENSOR  shall  negotiate  the  terms  and  price  of
maintenance  and support  services  following  the  conclusion  of the  warranty
period, provided that such maintenance and support services shall be provided on
at least the following terms:

    1)    LICENSOR shall provide telephonic, email, fax, phone and onsite
          support to ERICSSON on a time and materials basis.

    2)    At ERICSSON's option, ERICSSON may purchase up to[Confidential
          Material provided  separately to the SEC] of support for [Confidential
          Material provided  separately to the SEC] with  additional  time
          billed on an hourly basis at [Confidential  Material  provided
          provided  separately to the SEC] for separately to the SEC] per hour
          for remote and [Confidential Material onsite support, plus actual
          reasonable travel and living expenses.

    3)    ERICSSON shall have the right to terminate such maintenance and
          support services at any time upon thirty (30)days written notice
          to LICENSOR.

5. Fees

   a. Development Fees.

    1) Amount and Dates. ERICSSON shall pay LICENSOR development fees  upon the
       events and in the amounts set forth in APPENDIX C.

    2) Reports. LICENSOR shall deliver to ERICSSON monthly reports of LICENSOR's
       progress  on  the  Project  and  LICENSOR's  expenses  incurred  in
       connection  with the Project.  Such reports shall be due on the fifteenth
       day of each month for the prior month.  Each report shall contain a
       description  of the current status of the Licensed Programs and
       Documentation, the time spent on the Project by each  employee  of
       LICENSOR,  the tasks on which it was  spent,  the estimated  progress to
       be made in the next month, and the problems  encountered, the proposed
       solutions to them and their effect,  if any, on the  milestones or
       Deliverables.

  b. License Fees.

    1) In  General.  In  consideration  of  the  license  granted  by
       LICENSOR under this Agreement, ERICSSON shall pay LICENSOR a fee as set
       forth in APPENDIX B (the "License Fee").

    2) Payment Terms. Each installment of the License Fee shall be due and
       payable in accordance with the payment schedule set forth in APPENDIX B.

6. License Grant

        In  consideration  of payment to be made by  ERICSSON to LICENSOR of the
License  Fee(s) set forth above,  LICENSOR  hereby grants and agrees to grant to
ERICSSON a  worldwide,  non-exclusive  license to use,  copy,  incorporate  into
products to be sold, sell or otherwise distribute the Licensed Programs together
with the  Ericsson  product  platforms  identified  on APPENDIX A. No rights are
granted with respect to any Source Code.
<PAGE>

                                                       Exhibit 10.26 (continued)

         The rights  granted  herein shall  extend to all  ERICSSON  components,
subsidiaries,   affiliates  and  joint-venture  partners  worldwide,  which  are
majority controlled by Telefonaktiebolaget  LM Ericsson. In particular,  but not
by way of limitation, the rights granted herein shall extend to Ericsson Inc., a
Delaware  corporation,  having an address at 7001  Development  Drive,  Research
Triangle Park, NC 27709.

7. Change of Scope

         At any time during the term of this  Agreement,  should ERICSSON desire
LICENSOR to provide any additional  services in the form of a modification of or
a change to the Project, for example, should ERICSSON

desire to have the Licensed  Programs  modified for  operation  with a different
hardware platform, LICENSOR and ERICSSON shall comply with the following:

         a. Submission of Request.  ERICSSON shall submit to LICENSOR in writing
all requests by ERICSSON for any such  additional  services which alter,  amend,
enhance,  add to,  or  delete  from the  Project  and/or  time  and/or  place of
performance  (hereinafter  referred  to  as  "Modification/Change   Request"  or
"Request").

         b.    Acceptance    Procedure.     LICENSOR    will    evaluate    such
Modification/Change  Request  at no  additional  charge to  ERICSSON  as soon as
possible but not later than ten (10) working days following  LICENSOR's  receipt
of the Request.  LICENSOR's  written  response  shall include a statement of the
availability of LICENSOR's  personnel and resources,  the impact, if any, on the
completion  date and the change in costs, if any. The Parties agree to negotiate
the  charges  for any such  changes  in good  faith.  Should  ERICSSON  elect to
authorize  such Request,  ERICSSON  will, as soon as possible but not later than
ten  (10)   working   days,   authorize   LICENSOR  to  perform  the   requested
Modification/Change  Request by returning a duly  authorized copy of the Request
to LICENSOR.

         c.   Performance.   Upon  such   authorization   by   ERICSSON  of  the
Modification/Change  Request,  LICENSOR will commence  performance in accordance
with such Request  immediately.  LICENSOR  shall not be obligated to perform any
additional  services in advance of written  authorization from ERICSSON.  In the
event   that   LICENSOR   commits    resources   to   the   performance   of   a
Modification/Change  Request without such prior written authorization,  it shall
be presumed that  performance of such  Modification/Change  Request will have no
effect on the completion date.

         d.  Binding  Agreement.  For  the  purposes  of  this  Agreement,  each
Modification/Change Request duly authorized in writing by ERICSSON and agreed to
by LICENSOR  shall be deemed  incorporated  into and part of this  Agreement and
each  such  Request  shall  constitute  a  formal  amendment  to this  Agreement
adjusting  fees and completion  date as finally agreed upon for each  authorized
Modification/Change  Request.  In no event shall the services be deemed altered,
amended, enhanced, or otherwise modified except through written authorization by
ERICSSON of a  Modification/Change  Request and  acceptance by LICENSOR,  all in
accordance with this Section 7.

8.      Ownership of Licensed Programs and Intellectual Property Rights
<PAGE>
                                                       Exhibit 10.26 (continued)

        LICENSOR  shall retain title and ownership of the Licensed  Programs and
all  Intellectual  Property Rights therein except as otherwise  provided in this
Agreement or agreed between the Parties.


9.      Confidentiality

     a.   All ERICSSON  Proprietary  Information  and all  LICENSOR  Proprietary
          Information  disclosed under this Agreement that is proprietary to one
          or both  Parties,  in tangible  form  (including,  but not limited to,
          printed matter,  computer  software,  models,  specimens and the like)
          shall  be  clearly  identified  at the  time of  disclosure  as  being
          Proprietary  Information by an  appropriate  and  conspicuous  legend,
          marking,  stamp or other positive  identification  and if disclosed in
          oral  or  visual  form,  shall  be  identified  as  being  Proprietary
          Information  at the time of  disclosure or  observation,  and shall be
          confirmed as such in writing by the disclosing  Party to the receiving
          Party within thirty (30) days after such oral or visual disclosure.

     b.   For the  term  of  this  Agreement,  and  for  [Confidential  Material
          provided  separately to the SEC] thereafter a Party receiving  another
          Party's  Proprietary  Information  shall:  a)  handle,  safeguard  and
          protect such Proprietary  Information from  unauthorized or accidental
          disclosure or  unauthorized  use by the exercise of the same degree of
          care, but not less than reasonable care, as it employs with respect to
          information of its own of a similar nature which it does not desire to
          be published,  obtained or  disseminated;  b) not use such Proprietary
          Information  for  purposes  other than those  provided  for under this
          Agreement; c) not reproduce such Proprietary Information,  in whole or
          in part,  without  identifying  such whole or partial  reproduction as
          being  Proprietary  Information of the disclosing  Party;  and d) not,
          without the prior written permission of the disclosing Party,  furnish
          or otherwise disclose such Proprietary Information to any third party,
          nor to employees of the receiving Party not having a "need-to-know" of
          same except in the furtherance of the purposes of this Agreement or as
          otherwise provided in this Agreement.

     c.   Information shall not be considered to be Proprietary Information, and
          the recipient shall not be liable for the use and disclosure  thereof,
          if such information:

          (1)  as shown by  written  records,  was  known  or  available  to the
               receiving Party prior to receipt from the disclosing Party; or

          (2)  becomes  known or available to the  receiving  Party from sources
               other  than  the  disclosing  Party  without  restrictions  as to
               disclosure or use of the kind provided for by this  Agreement and
               otherwise than as a consequence  of breach of  obligations  under
               this Agreement; or

          (3)  as shown by written records,  is  independently  developed by the
               receiving Party; or

          (4)  is or becomes part of the general public  knowledge or literature
               otherwise than as a consequence  of breach of  obligations  under
               this Agreement; or
<PAGE>

                                                       Exhibit 10.26 (continued)

          (5)  is provided  by the  disclosing  Party to a third  party  without
               restrictions  as to disclosure or use of the kind provided for by
               this Agreement; or

          (6)  is  disclosed   pursuant  to  judicial  action  and  no  suitable
               protective order, or equivalent, is available.

     d.   No information disclosed under this Agreement,  other than Proprietary
          Information   shall  be  considered  to  have  been  submitted   under
          restriction  and the  recipient  may freely  disclose and use any such
          information  without obligation to the disclosing Party, except as may
          be created by valid patents owned by the disclosing Party.

     e.   The parties  hereto agree that the terms and  conditions  contained in
          this Agreement shall not be disclosed to any third party,  without the
          concurrence of the other party hereto.

     f.   Proprietary  Information  disclosed  by one Party to the  other  Party
          under this  Agreement  shall  remain the  property  of the  disclosing
          Party.

     g.   The  disclosing  Party  agrees to grant and does  hereby  grant to the
          other Party a  non-exclusive,  royalty-free  right to use  Proprietary
          Information disclosed in conjunction with this Agreement, and practice
          any Patents based  thereon,  solely  within the receiving  Party's own
          facilities  and  the  facilities  of  its  Subsidiaries,   solely  for
          fulfilling the purposes of this Agreement and only for the duration of
          this Agreement, except as otherwise provided in this Agreement.


10.     Indemnification and Limitation of Liability

     a.   LICENSOR shall indemnify and hold ERICSSON  harmless against and shall
          handle and defend against any claim, suit, or other proceeding brought
          against ERICSSON based on an allegation that the Licensed  Programs or
          any elements thereof, or the use of any Licensed Programs furnished by
          LICENSOR  pursuant  to  this  Agreement  constitutes  a  violation  or
          infringement of [Confidential Material provided separately to the SEC]
          patent,  copyright,  trade secret,  or other  proprietary  information
          right  provided that LICENSOR is notified  promptly in writing of such
          allegation,  suit, or proceeding and give full and complete authority,
          information and assistance (at LICENSOR's  expense) for the defence of
          same.  LICENSOR  shall pay all damages and costs  incurred by ERICSSON
          with respect to such suites or proceedings,  up to the amount received
          by  LICENSOR  under  this   agreement,   but  LICENSOR  shall  not  be
          responsible  for any compromise made by ERICSSON or its agents without
          LICENSOR'S  consent.  If such Licensed Programs are held by a court of
          competent  jurisdiction to constitute  infringement,  and their use is
          enjoined,  LICENSOR shall, at its own expense, either promptly procure
          the right for continued use of such Licensed Programs by ERICSSON, or,
          if the  performance  thereof will not thereby be materially  adversely
          affected  promptly  replace or modify such  licensed  Programs so that
          they become  noninfringing.  If neither of the actions  specified  for
          LICENSOR in the preceding sentence is commercially feasible, then as a
          last resort,  LICENSOR  shall accept return of such Licensed  Programs
          and refund to  ERICSSON  all license  fees paid by  ERICSSON  for such
          Licensed Programs,  plus any costs incurred by ERICSSON in the removal
          of such Licensed  Programs and  installation of alternative  products.
          During the pendency of any claims  against  LICENSOR or ERICSSON  with
          respect to LICENSOR's  ownership or  authority,  ERICSSON may withhold
          payment of any sum otherwise required to be paid hereunder.

     b.   ERICSSON agrees to hold LICENSOR harmless from and indemnify  LICENSOR
          against any and all liabilities,  demands, expenses or damages arising
          out of or  resulting  from  (1)  the  manufacture,  use or sale of any
          products or services by ERICSSON  other than products  containing  the
          Licensed  Programs,  or (2)  any  alteration  or  modification  of the
          Licensed Programs by ERICSSON without the consent of LICENSOR.

     c.   IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR  SPECIAL,  INCIDENTAL  OR
          CONSEQUENTIAL  DAMAGES,  EVEN IF THE  PARTY  HAS BEEN  ADVISED  OF THE
          POSSIBILITY OF SUCH DAMAGES.

     d.   The  provisions  of this  Section  10  relating  to  limitation  of or
          protection  against  liability  shall  apply  regardless  of fault (of
          whatever degree) and to the full extent permitted by law.
<PAGE>

                                                       Exhibit 10.26 (continued)

11.     Independent contractor

         LICENSOR  is and shall at all times be an  independent  contractor  and
shall not be deemed an employee or agent of ERICSSON.  Nothing in this Agreement
is  intended  to  constitute,  create,  give  effect  to or  otherwise  imply  a
partnership,  joint venture or other business  organization  of any kind between
the parties. Neither Party has any authority to bind the other.

12.     Other Agreements

        This Agreement,  including  Appendices,  contains the complete agreement
between the parties and shall,  as of the effective  date hereof,  supersede all
other agreements  between the parties relating to the Project and development of
the Licensed Programs and  Documentation.  The parties stipulate that neither of
them has made any  representation  with  respect to the  subject  matter of this
Agreement or the execution and delivery  hereof except such  representations  as
are specifically set forth herein.  Each of the parties hereto acknowledges that
they have  relied on their own  judgment in entering  into this  Agreement.  The
terms and conditions of the Appendices are incorporated herein by reference.  To
the extent that there is any conflict  between the terms and  conditions  of the
Appendices and this Agreement, the provisions of this Agreement shall control


13.     Modification of Agreement

         No  waiver  or  modification  of  this  Agreement  or of any  covenant,
condition,  or limitation  herein contained shall be valid unless in writing and
duly executed by both parties, and no evidence of any waiver or modification

shall be offered or  received in evidence  in any  proceeding,  arbitration,  or
litigation  between  the  parties  hereto  arising  out  of  or  affecting  this
Agreement,  or the rights or obligations of the parties  hereunder,  unless such
waiver or  modification  is in writing and duly  executed by both  parties.  The
parties  further  agree that the  provisions  of this  Section may not be waived
except as herein set forth.

14.     Forbearance--No Waiver

         Any failure by either  Party to enforce any of the  provisions  of this
AGREEMENT or to require at any time performance by the other party of any of the
provisions hereof,  shall in no way affect the validity of this AGREEMENT or any
part hereof,  or the right of either Party  thereafter to enforce each and every
such provision.

15.     Choice of Law

         It is the intention of the parties  hereto that this  Agreement and the
performance  hereunder  and all  suits  and  special  proceedings  hereunder  be
construed  in  accordance  with and  pursuant  to the laws of the State of North
Carolina.

16.     Agreement Binding on Successors

         This  Agreement  shall inure to the benefit of and be binding  upon the
successors and permitted assigns of the respective parties.
<PAGE>

                                                       Exhibit 10.26 (continued)

17.     Assignment Restricted

         LICENSOR may not assign this  Agreement in whole or in part without the
written  consent of the other party,  provided  that  LICENSOR may contract with
other parties to provide services  hereunder subject to ERICSSON's prior written
approval. ERICSSON may not assign this Agreement in whole or in part without the
consent of  LICENSOR,  except that  ERICSSON  may assign this  agreement  to any
parent, subsidiary, affiliate or joint venturer, which is majority controlled by
Telefonaktiebolaget  LM  Ericsson,  with  ERICSSON  that  agrees to  assume  all
obligations and liabilities of ERICSSON hereunder.

18.     Notices

All notices, demands, or requests provided for or permitted to be given pursuant
to this Agreement must be in writing.  All notices,  demands, and requests to be
sent to a party hereunder  pursuant hereto shall be deemed to have been properly
given or served by depositing  the same in the United States mail,  addressed to
such party, postage prepaid, and certified with return receipt requested, at the
address  set forth below or at such other  address as any party shall  hereafter
furnish to the others in writing:

        LICENSOR:     Communication Intelligence Corporation
                      275 Shoreline Drive
                      Suite 520
                      Redwood Shores, CA 94065
                      Attn: Mike Sullivan

                           With a copy to:



                      Communication Intelligence Corporation
                      275 Shoreline Drive
                      Suite 520
                      Redwood Shores, CA 94065
                      Attn: Legal Department


        ERICSSON:     Ericsson Mobile Communications AB
                      c/o Program Administrator, RTP
                      Ericsson Inc.
                      7001 Development Drive
                      Research Triangle Park NC 27709
                      Attn: Lynn Canada

                      with a copy to:

                      Ericsson Inc.
                      7001 Development Drive
                      Research Triangle Park NC 27709
                      Attn: Legal Department

<PAGE>

                                                       Exhibit 10.26 (continued)

19.     Warranty

         a. In General. LICENSOR warrants that the services will be performed in
a workmanlike  manner and that for a period of [Confidential  Material  provided
separately  to the SEC] days  following  ERICSSON's  acceptance  of the Licensed
Program,  the Licensed  Programs  will perform  according to the  specifications
agreed  upon by  LICENSOR  and  ERICSSON.  LICENSOR  will  repair or replace the
Licensed Programs during such [Confidential  Material provided separately to the
SEC] days as soon as possible after ERICSSON  informs  LICENSOR of any breach of
this warranty.

        b. Ownership and Authority.  LICENSOR represents and warrants that it is
the sole owner of the Licensed  Programs,  or has procured the Licensed Programs
under valid licenses from the owners thereof,  and LICENSOR  further  represents
and warrants  that it has full power and  authority  to grant the rights  herein
granted without the consent of any other person.

c. Code Integrity. LICENSOR warrants that Licensed Programs contain no "computer
viruses,"  "time bombs" or "Easter eggs" as those terms are commonly  understood
in the information processing industry. Specifically, LICENSOR warrants that the
Licensed  Programs  contain  no  code or  instructions  (including  any  code or
instructions  provided  by third  parties)  that may be used to access,  modify,
delete,  damage,  or  disable  any  computer,   associated  equipment,  computer
programs,  data files or other electronically stored information.  Except as may
otherwise be expressly  provided in this Agreement,  LICENSOR  hereby  expressly
waives  and  disclaims  any  right or  remedy it may have at law or in equity to
de-install, disable or repossess any Licensed Programs.

d.  Documentation.  Any  Documentation  furnished  with  the  Licensed  Programs
hereunder  will be in form and substance at least equal to comparable  materials
generally in use in the industry. If at any time such original  Documentation is
revised or supplemented by additional  documentation,  thereupon  LICENSOR shall
deliver to ERICSSON  copies of such revised or  additional  documentation  at no
charge in quantity equivalent to the

quantity of such original Documentation then in ERICSSON's possession.  ERICSSON
shall have the right to reproduce all documentation supplied hereunder.

e. Exclusions. This warranty excludes any claims based on defects in the License
Programs and Documentation caused by ERICSSON,  other parties beyond the control
of LICENSOR, or the hardware.  EXCEPT AS PROVIDED IN SUBSECTION 18. ABOVE, THERE
ARE NO  EXPRESS OR IMPLIED  WARRANTIES,  INCLUDING  THE  IMPLIED  WARRANTIES  OF
MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE, RESPECTING THIS AGREEMENT.

f. All Licensed Programs deliverable by LICENSOR hereunder containing or calling
on a calendar function including,  without  limitation,  any function indexed to
the CPU clock, and any function providing specific dates or days, or calculating
spans of dates or days  (collectively,  "Time-Keyed  Software"),  shall  record,
store, process, provide and, where appropriate,  insert, true and accurate dates
and calculations for dates and spans including and following January 1, 2000. As
part of its  maintenance  obligations,  LICENSOR  shall consult with ERICSSON to
assure that Licensed Programs will (i) have no lesser functionality with respect
to data containing dates both, or either,  before or after January 1, 2000, than
heretofore  with  respect  to  dates  prior  to  January  1,  2000  and  (ii) be
interoperable  with other  software used by ERICSSON  which may deliver data to,
receive data from or otherwise interact with Licensed Programs.
<PAGE>

                                                       Exhibit 10.26 (continued)

g. All software heretofore provided or specified to ERICSSON by LICENSOR whether
hereunder or under  separate  agreement,  if not  currently  capable of using or
rendering date- or  time-sensitive  data or supporting  interoperability  in the
manner  described in subsection e above, but still under  maintenance,  shall be
modified or replaced by LICENSOR  with  software  which  provides  all  existing
functionality  and is so  capable,  by a date no later  than  January  1,  2000,
without incremental charge therefor.


20.     Marketing

a. ERICSSON  shall have the right to brand one or more of the  following  with a
trademark or slogan of LICENSOR which is acceptable to ERICSSON:

i)      Data Sheets
ii)     Advertising
iii)    Product Packaging
iv)     Owner's Manuals

         In any such use, ERICSSON shall clearly indicate  LICENSEE's  ownership
of its trademarks.  ERICSSON shall display LICENSOR's  trademarks in conformance
with LICENSOR's  reasonable  instructions  from time to time,  provided that the
font type, size, color, placement and other aesthetic aspects shall at all times
be subject to the reasonable approval of ERICSSON.  LICENSOR shall indemnify and
hold ERICSSON  harmless  against and shall handle and defend  against any claim,
suit, or other  proceeding  brought against ERICSSON based on an allegation that
the use of LICENSOR's trademarks  constitutes a violation or infringement of any
trademark, service mark, trade name, or other proprietary information right.

b.   All  press  releases  of a Party  which  mention  the  other  Party or this
     Agreement must be reviewed and approved by the other Party.

c.   ERICSSON  shall,  at LICENSOR's  request,  provide  samples of  literature,
     packaging and advertising materials bearing LICENSOR's trademarks. ERICSSON
     agrees to maintain the high level of quality accorded  products  associated
     with and marketed by LICENSOR.  ERICSSON  shall not remove,  obliterate  or
     conceal  copyright or patent notices included in the Licensed  Programs and
     Documentation.

d.   Except as expressly provided herein,  neither Party is granted any right in
     or license to use any trademark or service mark of the other Party.

21.Enforceability

        If any  term  or  provision  of  this  Agreement  shall  be  invalid  or
unenforceable,  the remainder of this Agreement  shall not be affected;  and the
remainder  of this  Agreement  shall  be valid  and  enforceable  to the  extent
permitted  by  applicable  law. In  addition,  the  parties  shall in good faith
endeavor  to reach  agreement  on a provision  to replace the invalid  provision
which, as nearly as possible, will reflect the intent of the original provision.


         IN  WITNESS  WHEREOF,  each  of the  Parties  hereto  has  caused  this
AGREEMENT  to be  executed  in  duplicate  originals  by their  respective  duly
authorized officers or representatives.


Ericsson Mobile Communications AB         Communication Intelligence Corporation

By:     /s/Joakin Ingers                  By:     /s/Guido DiGregorio

Title:  Director Data Development         Title:  President

Print Name:    Joakin Ingers              Print Name:    Guido DiGregorio

Date:   November 30, 1998                 Date:   December 4, 1998
       -------------------                       -------------------

<PAGE>
                                                       Exhibit 10.26 (continued)

                                   APPENDIX A

                            CIC Product Descriptions

1. JOT

     a)   Jot is a natural  character set handwriting  recognition  system which
          supports US English and accented Roman  characters.  The patented user
          interface  utilizes a segmented  input panel which is divided into two
          regions and can be used in a box mode or full screen mode.

     b)   The Jot trainer allows user tuning of character recognition to improve
          recognition accuracy. c) The Jot animated tutorial demonstrates how to
          write the full  character set. d) The Jot Macro Editor allows the user
          to define  frequently  used  phrases or actions for quicker text entry
          and editing.


2. On-screen Keyboard

     The software  on-screen keyboard is an application that emulates a hardware
     keyboard  on the  screen.  The  user  can  touch  characters  on it and the
     characters are posted to the application  that has focus. The keyboard will
     support   accented  Roman  characters   currently   available  in  the  Jot
     recognizer.


3. Quick Notes

     QuickNotes  is  an  electronic  notetaking  and  ink  capture  application.
     QuickNotes incorporates CIC's patented INKshrINK compression technology for
     reducing  the  size of the note or  drawing  to a  fraction  of the size of
     standard graphical file formats (i.e.- bmp, gif or jpg).

4. Sign-It (login)

     Sign-it is a dynamic signature verification software which will utilize the
     login  API so that the  users  signature  can be used for  login  security.
     Sign-it includes CIC's SigCheck(TM)  handwritten signature verification and
     InkSentry(TM) data encryption algorithms. For use outside the United States
     a 40bit version of the encryption algorithms will be included.

<PAGE>

                                                       Exhibit 10.26 (continued)



                                  "Appendix B"
                              License Fee Schedule


Per unit Royalties shall be as follows:

  Jot                 [Confidential Material supplied separately to the SEC]
  On-Screen Keyboard  [Confidential Material supplied separately to the SEC]
  Quick  Notes        [Confidential Material supplied separately to the SEC]
  Sign-IT Login       [Confidential Material supplied separately to the SEC]


Licensee  shall pay a  non-refundable  fee of  [Confidential  Material  supplied
separately to the SEC],  due at contract  signing,  for  [Confidential  Material
supplied  separately to the SEC] Jot & On-Screen  Keyboard  Units.  Ericsson can
debit  against these  prepaid  credit units in  accordance  with the terms below
and/or any [Confidential  Material  supplied  separately to the SEC] platform as
determined by Ericsson internal management with notice to CIC.

[Confidential Material supplied separately to the SEC]

<PAGE>

                                                       Exhibit 10.26 (continued)

                                  "Appendix C"


                 Non-Recurring Engineering (NRE) Specifications

              Port CIC Pen Products to Pamela & Roxette Platforms

                                                                        Rev 2.7

<PAGE>

                                                       Exhibit 10.26 (continued)

Non-Recurring Engineering (NRE) Effort


                                 I. Introduction


This Scope of Work is  intended  to provide  the  framework  for porting key CIC
products  to  Ericsson's  Pamela  and  Roxette  platforms.  An  overview  of the
activities are included in the table below.

--------------------------------------------------------------------------------
CIC Product          Pamela [Confidential          Roxette [Confidential
                       Materialsupplied              Material supplied
                     separately to the SEC]        separately to the SEC]

--------------------------------------------------------------------------------
JotTM                          X                               X
On-screen Keyboard             X                               X
Word Jot (code name)           X
QuickNotes                     X
SignIt - Login                 X
--------------------------------------------------------------------------------

Porting to the [Confidential  Material supplied separately to the SEC] operating
system will be common to both  Ericsson  products.  Final porting and testing of
JotTM will be specific to each  platform  due the use of  different  processors,
screen sizes and user interfaces. Further, QuickNotes and SignIt (Login) will be
ported specifically to Pamela.

Under this proposal, CIC will work with Ericsson, and it's partners, to port the
above products to Ericsson's Pamela and Roxette. Smart Phone products,  focusing
on user interface,  recognition and input mechanisms.  Ericsson's responsibility
is the  general  structure  of the  product  around the  [Confidential  Material
supplied separately to the SEC] software layering and low level driver elements.
In the case of JotTM,  , it will post  characters to the  application  area as a
keyboard  would.  It is  assumed  that CIC will  work in close  connection  with
Ericsson,  Symbian and its other partners in this effort, in definition,  design
and implementation of these elements.

Software objects developed under this agreement,  which contain  proprietary CIC
technology (i.e. user interface,  character  recognition and input  mechanisms),
will be owned  exclusively  by CIC and shall be considered  part of the Licensed
Programs per Appendix B.

<PAGE>
                                                       Exhibit 10.26 (continued)

II. Core Deliverables from CIC

1.  Jot(TM)

e)   Provide JotTM recognition engine and patented user interface  capability to
     the  [Confidential  Material  supplied  separately to the SEC]  application
     environment.  Supported character sets  are[Confidential  Material supplied
     separately to the SEC]. The assumed user interface  model is  [Confidential
     Material  supplied  separately  to the SEC]  with  all Jot  user  interface
     elements (i.e.
     mode marks, relevant user interface labels) implemented in software.
f)   [Confidential  Material  supplied  separately  to  the  SEC]-based  Jot(TM)
     trainer  application,   to  allow  user  tuning  of  character  recognition
     optimized for each of Ericsson's Pamela & Roxette products.
g)   [Confidential  Material  supplied  separately  to  the  SEC]-based  Jot(TM)
     animated tutorial, with interface optimized for each of Ericsson's Pamela &
     Roxette products.
h)   [Confidential  Material supplied separately to the SEC]-based Macro Editor,
     with interface optimized for each of Ericsson's Pamela & Roxette products.


2.  On-screen Keyboard

     The software  on-screen keyboard is an application that emulates a hardware
     keyboard  on the  screen.  The  user  can  touch  characters  on it and the
     characters  are  posted  to the  application  that is  having  focus.  This
     proposal   addresses   porting  of  CIC's  standard   on-screen   keyboard.
     Customization  of user interface and character sets may require  additional
     development  and  charges  determined  by a mutually  agreeable  functional
     specification.

5.  [Confidential Material supplied separately to the SEC] Jot (Code name)

     Provide  same Jot  functionality  as in "1."  above.  CIC will  provide  an
     additional   mode  to  the  standard  Jot  interface  that  will  allow  it
     to[Confidential  Material supplied separately to the SEC].  Recognition and
     the  posting of  characters  may  proceed in  parallel.  The details of the
     metaphor  will be mutually  defined by CIC and Ericsson,  however,  it will
     essentially provide for a [Confidential Material supplied separately to the
     SEC].


6.  Quick Notes

     CIC will port it's current  Palm-size PC note taking  application to Pamela
     and optimize  the user  interface.  It will link to existing  [Confidential
     Material supplied  separately to the SEC] and email capability.  Additional
     work  may be  required  to  link  to the  standard  [Confidential  Material
     supplied separately to the SEC] productivity applications.  Synchronization
     to the CIC QuickNotes Desktop application will be handled separately.

7.  Sign-It (login)

     CIC will port it's  current  Sign-It  product to Pamela,  optimize the user
     interface and link to the [Confidential Material supplied separately to the
     SEC] login API so that the users  signature can be used for login  security
     to the Pamela device.

<PAGE>

                                                       Exhibit 10.26 (continued)

III.     Deliverables

This section  describes the deliverables for the project.  Any changes are to be
mutually agreed upon with appropriate approvals.

IIIa.   Deliverables Common to Pamela & Roxette

Alpha 0:
o Jot user interface and recognition engine implemented on[Confidential Material
supplied separately to the SEC].

IIIb.    Pamela Specific Deliverables

a.) Functional Specification:
o   Design recommendations for Jot and "[Confidential Material supplied
    separately to the SEC] Jot" on Pamela.
o   Testing plan and procedures for each Phase (Alpha,
    Beta, & GMC).
o   Written CIC deliverable specifications.

b.) Alpha 1:
o   Jot with test interface and recognition engine implemented on Pamela EP1.
o   Technical support to Ericsson by fax or email for integration support.

c.) Alpha 2:
o   Jot  &  "[Confidential  Material  supplied  separately  to  the  SEC]  Jot"
    recognition engine implemented on[Confidential Material supplied separately
    to the SEC].
o   Technical support to Ericsson by fax or email for integration support.

d.) Alpha 3:
o   Quick Notes & Sign-It (login) implemented on [Confidential Material
    supplied separately to the SEC].
o   Technical support to Ericsson by fax or email for integration support.

e.) Beta:
o   Jot,  "Word  Jot",  Macro  Editor,   Trainer  and  Tutorial   implemented
    on Final[Confidential  Material  supplied  separately  to the SEC].
o   Quick  Notes Tutorial implemented on  Final [Confidential  Material
    supplied separately to the SEC].
o   Sign-It implemented on Final[Confidential Material supplied separately
    to the SEC].
o   Sample code for testing and integration.
o   Technical support to Ericsson by fax or email for integration support.

f.) Final Integration Testing:
o   Final  integration  and testing of Jot,  "[Confidential  Material  supplied
    separately to the SEC] Jot", macro editor, and tutorial, trainer on EP2.
o   Final integration and testing of Soft Keyboard on EP2.
o   Final integration and testing of Quick Notes, Sign-It (login) on EP2.
o   Technical support to OEM by fax or email for integration support.
o   On site integration testing and support in Ericsson facilities in Raleigh,NC
o   Sample code for testing and integration.
o   Software will be tested in accordance with Ericsson software standards.
<PAGE>

                                                       Exhibit 10.26 (continued)


g.) Final Deliverables
o   Golden Master Disk (Product-quality software) containing;
o   Jot user interface, recognition engine, trainer and macro editor implemented
    on EP2.
o   On-screen keyboard implemented on EP2.
o   "[Confidential Material supplied separately to the SEC] Jot" implemented
    on EP2.
o   Quick Notes implemented on EP2.
o   Sign-It (login) Jot user interface, recognition engine, trainer and macro
    editor implemented on EP2.
o   Final Documentation including;
o   User documentation (per license agreement).
o   Final documentation of API's and software structure.


IIIc.    Roxette Specific Deliverables

a.) Functional Specification:
o   Design recommendations for Jot on Roxette.
o   Testing plan and procedures for each Phase (Alpha, Beta, & GMC).
o   Written CIC deliverable specifications.

b.) Alpha 1:
o   Jot recognition engine implemented on Roxette EP1.
o   Technical support to Ericsson by fax or email for integration support.

c.) Beta 1:
o   Jot user interface and  recognition  engine  implemented on Roxette EP2 SDK.
o   Jot tutorial, macro editor and trainer implemented on Roxette EP2 SDK.
o   Soft Keyboard implemented on Roxette EP2 SDK.
o   Sample code for testing and integration.
o   Documentation of APIs and software structures.
o   Technical support to Ericsson by fax or email for integration support.

d.) Final Integration Testing:
o   Final integration and testing of Jot, macro editor, trainer and tutorial
    on EP2.
o   Final integration and testing of Soft Keyboard on EP2.
o   Technical support to OEM by fax or email for integration support.
o   On site integration testing and support in Ericsson facilities in Manchester
    , England.
o   Sample code for testing and integration.
o   Software will be tested in accordance with Ericsson software standards.

e.) Final Deliverables
o   Golden Master Disk (Product-quality software) containing;
o   Jot user interface, recognition engine, trainer and macro editor implemented
    on Roxette EP2.
o   On-screen keyboard implemented on EP2.
o   Final Documentation including;
o   User documentation (per license agreement).
o   Final documentation of API's and software structure.
<PAGE>

                                                       Exhibit 10.26 (continued)



IV.       Dependencies

Note:  These  dependencies  may  affect  CIC's  ability  to deliver a given
deliverable or to meet the agreed schedule milestones.

o  Completion of NRE & License Agreements between CIC and Ericsson.
o  Ability to get necessary development tools/information from either Ericsson
   or key vendors  (Operating System,  Processor,  etc.)
o  Ericsson delivery to CIC of necessary components to simulate Pamela & Smart
   Phones Roxette (Early Prototypes and SDK's).
o  Cooperation and clear definition of User Interface requirements.


<PAGE>


[OBJECT OMITTED]
                                                       Exhibit 10.26 (continued)


 Material Costs

 [Confidential Material supplied separately to the SEC]

  On Site Integration and Testing Costs:

 [Confidential Material supplied separately to the SEC]

    --------------------------------- ------------------------------------------
               Item                                        Est. Cost
    --------------------------------- ------------------------------------------
    --------------------------------- ------------------------------------------
     Integration test in Raleigh, NC  [Confidential Material supplied separately
                                        to the SEC]

    --------------------------------- ------------------------------------------
    --------------------------------- ------------------------------------------
     Integration test in Manchester   [Confidential Material supplied separately
                                        to the SEC]

    --------------------------------- ------------------------------------------
    --------------------------------- ------------------------------------------
     Est. Travel & Living Expenses    [Confidential Material supplied separately
                                        to the SEC]

     --------------------------------- -----------------------------------------
     --------------------------------- -----------------------------------------
                   Est. Total         [Confidential Material supplied separately
                                        to the SEC]

     --------------------------------- -----------------------------------------


<PAGE>

                                                       Exhibit 10.26 (continued)

Terms of Agreement;

o       [Confidential Material supplied separately to the SEC].
o       "Other Costs" will be billed as incurred for actual amounts.

VI.     Definitions & Acceptance Criteria

Any changes are to be mutually agreed upon with appropriate approvals.

o    Alpha Version:  Key functionality  implemented but contains known bugs that
     may  cause  fatal  errors  occasionally  (i.e.  system  hanging,   loss  of
     information).  Engine is fully  implemented and work in OEM OS emulator but
     there may be fatal errors. After CIC delivers the software,  Ericsson shall
     integrate  it to  development  board  and  verify  that it meets  the above
     performance criteria within  [Confidential  Material supplied separately to
     the SEC] weeks.  If there is no written  disagreement  after  [Confidential
     Material  supplied  separately  to the SEC]  weeks,  it is deemed  that the
     release is done.

o    Beta Version:  All components are  implemented but the software may contain
     known  bugs of minor  severity,  no known  fatal  errors.  User  Interface,
     recognition engine,  trainer, macro editor are all implemented and have the
     desired  UI and  functionality.  There may be some  minor bugs but no fatal
     errors  that  cause  system  hang or data  loss.  After  CIC  delivers  the
     software,  Ericsson  shall  integrate it to their  respective  products and
     verify  it  meets  the  above  performance  criteria  within  [Confidential
     Material  supplied  separately  to the SEC]  weeks.  If there is no written
     disagreement after  [Confidential  Material supplied separately to the SEC]
     weeks, it is deemed that the release is done.

o    Golden Master  Candidate:  The software is fully functional and contains no
     known problems.  It is ready for product  shipment.  After CIC delivers the
     software, Ericsson shall integrate it to the respective products and verify
     it  meets  the  above  performance  criteria  with  [Confidential  Material
     supplied separately to the SEC] weeks. If there is no written  disagreement
     after  [Confidential  Material supplied separately to the SEC] weeks, it is
     deemed that the release is done and the version is the final Golden  Master
     release.

In practice there may be intermediate releases for Alpha, Beta and Golden Master
Candidate versions. For example, CIC may release Alpha1, Alpha2, Beta1, Beta2 or
GMC1,  GMC2 etc, and Ericsson may give feedback for each release.  CIC continues
to fix problems until both parties agree that a release meets the above criteria
and it is deemed the final Alpha, final Beta or final GMC.

VII.         Licensed Deliverables

The following is a description of licensed deliverables to be bundled on the
respective Pamela & Roxette products;

o JotTM  Handwriting   Recognition  engine  for  Ericsson  implementation  of
  [Confidential Material supplied separately to the SEC] based Smart Phone.
o JotTM User Interface for Ericsson  implementation  of  [Confidential  Material
  supplied  separately to the SEC] based Smart Phone.
o JotTM  Trainer,  Animated Tutorial, and Macro Editor for Ericsson
  implementation of [Confidential Materialsupplied separately  to the SEC] based
  Smart Phone
o Sign-ItTM
o QuickNotesTM


<PAGE>
                                                       Exhibit 10.26 (continued)
--------------------------------------------------------------------------------

CIC                                                            November 19, 1998
Confidential
--------------------------------------------------------------------------------

                                                                 READ 1998:17429





Communication Intelligence            Ericsson Commercial
Corporation

By:    /s/Guido DiGregorio            By:   /s/Del Hanson
       ---------------------                --------------------------

                                             Program Director
Title: President                      Title: SW Technology Provisioning
       ------------------                    --------------------------

Date:  December 4, 1998               Date:    12/1/98
       ------------------                   -------------------------


Ericsson Roxette Technical Manager     Ericsson Pamela Technical Manager


By:    /s/Joakin Ingers                   By:   /s/Danny Bravo
       -------------------                     -------------------------

Title: Director Data Development       Title: Sr. Project Manager
       -------------------------              ------------------------



Date:  November 30, 1998               Date: 12/1/98
      --------------------                   --------------------------